This paper reviews the key aspects of general strikes and analyses the economic cost of such
strikes in Nepal. Data analysis shows that average direct cost of general strikes stood at NRs. 1.8
billion per strike day and NRs. 27 billion per year at current prices during 2008-2013. The lost
output per year accounted for 1.4 percent of the annual gross output. The total accumulated
output loss due to general strikes in the five-year period amounted to NRs. 117 billion. With such
losses, general strikes decelerated annual GDP growth rates in a range between 0.6 percentage
point and 2.2 percentage points during the study period. The impact of general strikes was quick
and significant on inflation and tourist arrival rates. The monthly inflation rate jumped to over 9
percent as a result of two-day general strike while the strike called for three or more days led to
an inflation of more than 10 percent. Similarly, tourist arrival declined over a lag. However, gross
fixed capital formation and foreign direct investment appeared to be less affected by general
strikes, which might be due mainly to their bottomed out levels.

This study examines the overall trade pattern and flow of trade of Nepal by using pooled ordinary
least square (OLS) along with one-year lag gross domestic product (GDP). It has also attempted
to find the structural shift in the economy after economic liberalization in Nepal. In this study,
gravity model is applied with comprehensive panel dataset for 29 years time period covering
Nepal’s 94 trading partners. The results appear robust to specification, time period and trade
determinants. Following a convention in this field, this study separates exports and imports
instead of using total trade turnover. The empirical results are found consistent with the
fundamental of gravity model as the study reveals positive coefficients for economic size and
negative coefficients for distance. No significant structural break is found in the determinants of
trade after economic liberalization. The results from simulation while comparing actual trade with
predicted trade show that Nepal’s trade is not distorted by political decisions such as economical
sanctions imposed by other countries. The results also suggest that trade with India in comparison
to China is quite substantial. The results suggest that Nepal needs trade diversification in general
and trade agreement with China in particular to reap the benefits from the trade.

In the field of international trade, an economy is assumed to be reeling under the ‘BLACK HOLE
EFFECT’ originating from another economy, if all the major variables of international trade,
irrespective of in which country they belong to, solely act in the favor of the latter economy. The
results based on the models suggest that all the economic variables used in the study, whether
Nepalese or Indian, show more favor to Indian economy compared to Nepalese economy
confirming that Nepal has been spiraling into the ‘BLACK HOLE EFFECT’ originated from the
Indian economy. Such an effect tends to be an everlasting phenomenon until and unless a
substantially enough counterbalancing force is applied to nullify it. The ‘BLACK HOLE EFFECT’
explains why Nepal has not been able to reap the benefit in trade with India that would have come
from the ‘locomotive effect’ of the robust growth of the Indian economy.

In this paper international demand for Nepali tourism from the selected major markets has been
estimated using time series data of number of tourist arrivals, per capita income, own price and prices
of related goods. Autoregressive distributive lagged (ARDL) models are applied as a tool of
estimation. This study confirms that tourism demand for Nepal is the composite function of disposable
income, own price, cross price, lags of these variables, word of mouth of the visitors and qualitative
factors captured by dummies. The most important policy implication can be derived from the words of
mouth of the visitors. This manifests that only the good impression on the visitors can generates better
words of mouth in favour of destination which underscores the up-gradation of the tourist products
for the better image of the destination. The best performed models are used for forecasting the growth
rates of tourist arrivals from the eight major markets for 2010 to 2020. The forecasted growth rates of
tourist arrivals from major eight market are found very close to the actual average annual growth
rates for 2006 to 2010.

This paper analyses the perceptions of managers on dividend policy by surveying the views of 125
Managers of 66 companies listed at Nepal Stock Exchange. This survey is motivated by the
observation that much of dividend policy theory is implicitly based on a capital market
perspective. Out of 66 listed enterprises surveyed, 16 were from banks and 50 were from nonbanks.
To examine whether views of managers on dividend policy differ between banking group
and non-banking group, chi-square analysis was used. Spearman’s rank correlation coefficient
was calculated to find out the degree of relationship between the responses of banking group and
non-banking group and it was tested for significance at 5 percent level of significance. Median
value of responses for each statement of observation on dividend policy was computed to highlight
the significance of observation. The results of this study indicate that the most important
determinants of dividend policy in order are growth rate of enterprise’s earnings, patterns of past
dividends, availability of investment opportunities; managers have more emphasis on the stable
dividend policy; and dividend policy influences the value of the enterprise in Nepal. The findings
of the study could be useful for research scholars, and users of financial information including
corporate managers, investors, financial analysts, and regulators. The current study extends
limited previous research based on questionnaire and survey related dividend policy. It thus
provides new evidence from a pre-emerging capital market of Nepal.